Los Angeles industrial lease rollover expected to drive demand through 2021
February 18, 2019
- Nearly 300 industrial tenants occupying space over 50,000 square feet will have their leases rollover in the next two years (2020 & 2021). The volume of renewals will increase due to strong demand and limited supply, as 34 million square feet of prospects will have little choice but to renew in their existing space or consider other options like moving outside of the market.
- These market conditions are driving quicker tenant response on leasing decisions. Tenants now realize relocation opportunities are very limited and are getting into discussions with their landlords about renewing their leases earlier than the typical 12-18 months before lease expiration. With only 6.0 million square feet of new product currently in the development pipeline, the gridlock in the Los Angeles market will continue.
- With limited land for new development, there’s little chance that more industrial space will come to the market quickly, unless obsolete properties get repurposed for warehouse and distribution use.
Source: JLL Research